MCQOPTIONS
Saved Bookmarks
MCQOPTIONS
This section includes 571 Mcqs, each offering curated multiple-choice questions to sharpen your Bachelor of Management Studies (BMS) knowledge and support exam preparation. Choose a topic below to get started.
| 551. |
ABC ltd. uses the following flexible budget formula to annual maintenance cost: Total cost = Rs. 6720 + Rs. 0.64 for machine hour The current month's budget is based on 20,000 hours of planned machine time. The maintenance cost included in this flexible budget for the current month is |
| A. | rs. 12,800 |
| B. | rs. 13,360 |
| C. | rs. 12,240 |
| D. | rs. 13,600 |
| Answer» C. rs. 12,240 | |
| 552. |
A company has the following budget for the six month: Finished product Materials Sales - 7,000 units Usage per unit - 3 kg Production units - 7200 units Opening stock - 400 kg Closing stock - 500 kg What is the material purchase budget for the month? |
| A. | 21,700 kg |
| B. | 20,900 kg |
| C. | 21,100 kg |
| D. | 21,500 kg |
| Answer» B. 20,900 kg | |
| 553. |
PP Ltd is preparing the production and material purchase budgets for one of their products, The SUPERX for the forthcoming year. The following information is available: Sales demand (units) 30000 Material usage per unit 7 kgs Estimated opening inventory 3500 units Required closing inventory 35% higher than opening inventory How many units of the SUPERX will need to be produced? |
| A. | 31225 |
| B. | 30000 |
| C. | 28775 |
| D. | 38225 |
| Answer» B. 30000 | |
| 554. |
A company is preparing a production budget for the next year. The following information is relevant : Budgeted sales 10,000 units Opening stock 600 units Closing stock 5% of budgeted sales The production process is such that 10% of the units produced are rejected. What is the number of units required to be produced to meet demand? |
| A. | 8,900 units |
| B. | 9,900 units |
| C. | 11,000 units |
| D. | 10,900 units |
| Answer» D. 10,900 units | |
| 555. |
A company estimates its direct material requirements for the month of November 2014 to be Rs. 2,40,000 and the direct labour to be Rs. 1,500,00. It is the policy of the company to absorb overheads as under : Factory overheads 60% of direct wages Administrative overheads 20% of work cost Selling and distribution overheads 25% of work cost it is estimated that the selling and distribution overheads will increase by 15% in November the budgeted sales for the month of November 2014 is |
| A. | rs. 9,21,600 |
| B. | rs. 8,56,800 |
| C. | rs. 6,87,150 |
| D. | rs. 9,09,900 |
| Answer» C. rs. 6,87,150 | |
| 556. |
The CIMA definition of zero-based budgeting is set out below, with two blank sections. "Zero-based budgeting: A method of budgeting which requires each cost element ____________, as through the activities to which the budget relates ____________." Which combination of two phrases correctly complete the definition? |
| A. | to be specifically justifies, & were being undertaken for the first time |
| B. | to be set zero, & could be out-sourced to an external supplier |
| C. | to be specifically justifies, & could be out-sourced to an external supplier |
| D. | to be set zero, & were being undertaken for the first time |
| Answer» B. to be set zero, & could be out-sourced to an external supplier | |
| 557. |
Which of the following items should be included in a cash budget? (i) Loan repayments (ii) depreciation charges (iii) tax provision (iv) wages paid |
| A. | (i) and (ii) |
| B. | (iii) and (iv) |
| C. | (ii) and (iii) |
| D. | (i) and (iv) |
| Answer» E. | |
| 558. |
When preparing a production budget, the quantity to be produced equals: |
| A. | sales quantity plus opening stock minus closing stock |
| B. | sales quantity - opening stock + closing stock |
| C. | sales quantity + opening stock + closing stock |
| D. | sales quantity - opening stock minus closing stock |
| Answer» C. sales quantity + opening stock + closing stock | |
| 559. |
Which of the following is normally the most appropriate sequence of events in the preparation of the indicated budgets? |
| A. | sales budget, cash budget, production budget, budgeted balance sheet |
| B. | sales budget, cash budget, budgeted balance sheet, production budget |
| C. | sales budget, production budget, budgeted balance sheet, cash budget |
| D. | sales budget, production budget, cash budget, budgeted balance sheet |
| Answer» E. | |
| 560. |
Which one of the following items would NOT be included in a cash budget? |
| A. | dividend payments |
| B. | capital repayments of loans |
| C. | depreciation charges |
| D. | proceeds of sale of fixed assets |
| Answer» D. proceeds of sale of fixed assets | |
| 561. |
A master budget comprises the |
| A. | budgeted income statement budgeted balance sheet and budgeted cash flow only |
| B. | budgeted income statement and positive cash flow only |
| C. | budgeted income statement and budgeted balance sheet only |
| D. | budgeted income statement and budgeted capital expenditure only |
| Answer» B. budgeted income statement and positive cash flow only | |
| 562. |
A budget that gives a summary of all the functional budget is known as |
| A. | fixed budget |
| B. | capital budget |
| C. | master budget |
| D. | flexible budget |
| Answer» D. flexible budget | |
| 563. |
Master budget comprises |
| A. | a the budgeted profit and loss account |
| B. | budget cash flow |
| C. | budgeted cash flow budgeted profit and loss budgeted balance sheet |
| D. | entire sets of budgets prepared |
| Answer» D. entire sets of budgets prepared | |
| 564. |
Which of the information below should be contained in a budget manual? |
| A. | a list of account codes |
| B. | an organisation chart |
| C. | timetable for budget preparation |
| D. | all of the above |
| Answer» E. | |
| 565. |
Which of the following are purpose of a budget? i) Establishing strategic options ii)Motivating management iii) Establishing long term objectives iv) Planning operations |
| A. | (i) and (ii) only |
| B. | (ii), (iii) and (iv) only |
| C. | (i) and (iv) only |
| D. | (ii) and (iv) only |
| Answer» E. | |
| 566. |
If the activity level is reduced from 80 % to 70%, the fixed cost |
| A. | will increase by 10% |
| B. | per unit will decrease |
| C. | will decrease by 10% |
| D. | per unit will increase |
| Answer» E. | |
| 567. |
When a flexible budget is used a decrease in the actual production level within a relevant range would |
| A. | increased total fixed cost |
| B. | decrease variable cost per unit |
| C. | decrease variable cost |
| D. | increase variable cost per unit |
| Answer» D. increase variable cost per unit | |
| 568. |
When a flexible budget is used then increase in the actual production level within a relevant range would increase |
| A. | variable cost |
| B. | both (a) and (b) |
| C. | total cost |
| D. | fixed cost |
| Answer» C. total cost | |
| 569. |
The classification of fixed and variable cost has a specific significance in the preparation of |
| A. | zero-based budget |
| B. | flexible budget |
| C. | capital budget |
| D. | cash budget |
| Answer» C. capital budget | |
| 570. |
Which of the following statements is / are true with regard to flexible budgeting? |
| A. | both (a) and (b) |
| B. | it involves a careful differentiation between fixed and variable expenses |
| C. | it is a system of budgeting under which budgets are recast quickly for changes in the volume of activity |
| D. | a flexible budget is one which changes from year to year |
| Answer» B. it involves a careful differentiation between fixed and variable expenses | |
| 571. |
Which of the following is / are true with regard to the period of budget? i) the budget period depends on the nature of industry ii) master budget is prepared annually while functional budget may be for different periods iii) Basic budget is the long term budget |
| A. | only (i) above |
| B. | only (ii) above |
| C. | both (i) and (ii) above |
| D. | all (i), (ii) and (iii) above |
| Answer» E. | |